Apple acquires Israeli 3D chip developer PrimeSense

A worker wipes a poster advertisement for Apple's iPhone 5C on a wall in Tokyo, September 20, 2013.
REUTERS/Yuya Shino/Files

JERUSALEM Apple Inc (AAPL.O) has bought Israel-based PrimeSense Ltd, a developer of chips that enable three-dimensional machine vision, the companies said on Monday, a move that signals gesture-controlled technologies in new devices from the maker of iPhones and iPads.

An Apple spokesman confirmed the purchase but declined to say how much it spent or what the technology will be used for. Israeli media said Apple paid about $350 million for PrimeSense, whose technology powers the gesture control in Microsoft Corp's Xbox Kinect gaming system.

"Apple buys smaller technology companies from time to time, and we generally do not discuss our purpose or plans," an Apple spokesman said in an e-mail.

A spokeswoman for PrimeSense said: "We can confirm the deal with Apple. Further than that, we cannot comment at this stage."

It was the second acquisition of an Israeli company by Apple in less than two years. Apple bought flash storage chip maker Anobit in January 2012.

PrimeSense's sensing technology, which gives digital devices the ability to observe a scene in three dimensions, was used to help power Microsoft's (MSFT.O) Xbox Kinect device.

The Israeli company has licensed the technology to Microsoft but it is unclear how that deal changes with Apple's acquisition of PrimeSense, which provides the technology behind Kinect's visual gesture system.

Apple and Microsoft have other licensing deals between them. Microsoft did not return a call seeking comment.

Analysts are expecting PrimeSense's technology to show up in Apple devices in about 12-18 months from now, potentially in the often-speculated device for the living room such as a television, dubbed iTV by fans.

"While we have not had any more evidence of an iTV coming in the next 6 to 12 months, some sort of living room appliance is in Apple's future and gesture technology could be critical," Peter Misek, analyst with Jefferies said in a note to clients.

Apple's interest in PrimeSense was first reported in July by Israeli financial newspaper Calcalist. The paper last week noted that PrimeSense has raised $85 million from some of its investors such as Israeli and U.S. venture capital funds Canaan Partners Global, Gemini Israel and Genesis Partners.

(Reporting by Steven Scheer and Poornima Gupta; Additional reporting by Chandni Doulatramani in Bangalore; Editing by Ted Botha and David Gregorio)

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